On December 20, 2018, the Company had a telephonic meeting with senior members of the FDA. Based on the feedback received from the FDA, while the NeoCart
Phase 3 clinical trial resulted in certain compelling data, the FDA indicated that an additional clinical trial would need to be completed before it would accept a submission of a BLA for NeoCart. The FDA indicated receptivity to novel clinical
trial methodologies and regenerative medicine advanced therapy designations in order to support additional data for a future potential submission. However, considering the time and funding required to conduct such a trial, the Company expects to
discontinue the development of NeoCart and does not plan to submit a BLA.
The Company has not yet received an official FDA notification of the
determination made by the FDA and discussed at the December 20, 2018 meeting and the information in this Current Report on Form
8-K
may be altered or supplemented by the information contained in the
official documentation.
The Board has initiated a process to evaluate strategic alternatives to maximize value for all stakeholders. This process, which
will be conducted with the assistance of financial and legal advisors, will consider the full range of potential strategic alternatives, which includes, but is not limited to, acquisitions, business combinations, joint ventures, public and private
capital raises, recapitalization, and sale transaction options, including a sale of assets or intellectual property. Since these efforts may not be successful and in light of its limited cash reserves the Company is considering all possible
alternatives, including restructuring activities, a wind-down of operations, or seeking chapter 11 bankruptcy protection to complete or execute a restructuring transaction or liquidation. The Company intends to implement a restructuring plan to
reduce costs.
The Company has retained Canaccord Genuity LLC as financial advisor to assist in the review and will engage such other advisors and consult
with existing advisors as appropriate.
The Company has determined not to proceed at this time with its earlier plans to conduct a stockholder meeting to
increase its authorized shares and a reverse split, for which it had filed a preliminary proxy statement with the SEC on October 18, 2018.
A copy of
the Companys press release dated December 21, 2018 announcing the results of its December 20, 2018 discussions with the FDA and its plans to evaluate strategic alternatives is attached hereto as Exhibit 99.1 and is hereby
incorporated by reference herein.
Supplemental Risk Factor
In connection with entering into the disclosure set forth above, the Company is also updating the risk factors, and subsequent filings, included in its Annual
Report on Form
10-K
for the year ended December 31, 2017 and Quarterly Report on Form
10-Q
for the quarter ended September 30, 2018, as follows:
4